India’s tough stand at WTO reflects Modi's foreign policy goals as well as his domestic ones

NEW DELHI: India's tough stand on the trade facilitation agreement at the World Trade Organisation surprised the West, especially the US — more so because it came soon after the announcement of a BRICS bank headquartered in China — but it reflects Prime Minister Narendra Modi's considered foreign policy goals as well as his domestic ones.

Top sources in the government said the prime minister was the main moving force behind the tough stand at the WTO by Commerce Minister Nirmala Sitharaman. But this is of a piece with Modi's thinking on the BRICS bank, they said.

He didn't kick up a fuss over where the bank would be based because he wanted the initiative to make a larger point.

"In the midst of the negotiations over the headquarters, when other countries were demurring over whether or not it should be Shanghai, it was the Indian prime minister who intervened and said that the demand of the Chinese should be conceded, and the bank should be given a liftoff at this meeting itself," said a top government official.

"He said that this was the only way the rest of the world would get the message that it was a serious enterprise." Not only would a new BRICS bank as an alternative to the World Bank-IMF combine go down well at home, it would also send a message to the West which had its doubts over Modi before the elections and, after he became prime minister, whether he had statesman like ability.

While in Brazil, where the BRICS summit was held, the South African delegation was surprised to learn that commerce minister Sitharaman had been asked to attend the G-20 meeting in Sydney ahead of the WTO general council in Geneva.

At Sydney, Sitharaman made it clear that India's concerns couldn't be wished away. She made a forceful intervention at the summation of the G-20 meet, asking that India's problems with the trade facilitation pact and the valuation issues of agricultural products and public stockholding be put on record, following that up with a call to the prime minister apprising him of all that happened.

"The very next day (last Sunday) the PM called concerned secretaries and firmed up India's position for the WTO talks to be held on Thursday and Friday in Geneva. On Monday, he called a Cabinet meeting, just as the minister herself flew in to Delhi, and ratified the stance," said a source in the government.

While some liken this to Atal Bihari Vajpayee seeking to announce India's arrival on the world stage as a global power by testing nuclear weapons in 1998, it may have had more prosaic domestic compulsions.

The prime minister's electoral promise to Indian farmers during the elections that the government would ensure a 50% profit margin could be one reason why India is hardening its position at the WTO.

Whatever the motives of the prime minister in what are being seen as aggressive foreign and trade policy moves, they have ensured that his September visit to the US will be watched very, very carefully.

PROMISE TO FARMERS

PM's promise to farmers during the elections that the government would ensure a 50% profit margin could be one reason why India is hardening its position at the WTO.